The Home Buyer Tax Credit Has Risen From the Grave!

September is the new June, as the deadline to close on houses purchased with the First Time Home Buyer Tax Credit comes…and goes.

If you can produce paperwork indicating that you signed papers on a home purchase before April 30, you now have until September 30 to close. The original deadline for the tax credit was settlement by today. But claiming that settlement offices are "slammed" by all the business the tax credit has generated, the House of Representatives voted overwhelmingly yesterday to give buyers another three months to settle.

The Senate is trying to pass its own version of the extension now. Reuters notes that the extension is an invitation to fraudsters who will backdate purchase papers to before the April 30 deadline.

As always though, the real fraud is hidden in plain sight. May figures [pdf] show how the real estate market tanked as soon as the tax credit was withdrawn. The tax credit is the last injectable vein in the shriveled body of the American real estate market. Without it, there's nothing standing between dumb buyers and the horror of price discovery.

This extension applies only to papers signed prior to April 30, but you don't get a 409-5 vote in the House just for creating leeway in paperwork filing. Like Uncle Frank in Hellraiser, the First Time Home Buyer Tax Credit is now back in only blood-and-nerve form, but it will keep murdering taxpayers and be back in full body before real estate values fall to a market-clearing level.

Comments

[mr simple]

Yes, it's been obvious all along that the only thing these incentives do is keep housing prices artificially inflated while borrowing demand from the future. Meanwhile, inventories are shooting up as people re-list their homes they took off the market after months of not selling. But hey, we wouldn't want the price to correct and the market to clear. Then we might have to admit that any investment has risk in it that can't be taken out by any amount of laws or wishful thinking.

[No Name Guy]

Actually, it's just borrowing demand from the future.

Had to put a house on the market (I'm the executor of the estate). It had exactly one showing in the 3 weeks it's been on the market so far. It was priced at what seemed reasonable compared to the comps on the market at listing time, in fact, it's nicer, and was a few k less. Just cut the list by 10k today. Going to keep cutting every few weeks until it sells.

My agent says there is practically no action from buyers in spite of 30 year fixed at 4.5%.

[skr]

where is the property?

[US Defecit]

"Actually, it's just borrowing demand from the future."

That's what I do!

[Kalifornia]

Me Too

[TallDave]

But... but... Keynes!

[J sub D]

We (that is the government) will do everything possible to keep home prices from falling further. At least until November 2nd.

I've been asking for years "What's so bad about lower home prices?"

I have yet to hear an answer that makes sense.

[Congress]

"What's so bad about lower home prices?"

Um, 'cause then a person's Biggest Purchase/Investment? wouldn't be as ... big?

[J sub D]

Still haven't but thanks for weighing in anyway.

[Subsidize Me!]

In the mind of a statist, there is a huge difference in lower prices due to market correction, and lower prices due to legislative benevolence.

Only one leads to higher approval ratings.

[skr]

lower property tax revenue....duh

[swillfredo pareto]

lower property tax revenue....duh

I would not doubt for a second that most of the dullards in Congress think this but there is no relationship between appraised and assessed values. Plus property taxes are for the local chumps and there is little in it for Washington.

[CrackertyAssCracker]

Ya I'm still waitin for that to kick in.

[JoshINHB]

"What's so bad about lower home prices?"

It leads to unemployment

of politicians.

[Rich]

Without it, there's nothing standing between dumb buyers and the horror of price discovery.

Oh, ye of little faith.

[Subsidize Me!]

The five votes against:
Campbell (R-CA)
Flake (R-AZ)
Hensarling (R-TX)
Linder (R-GA)
McClintock (R-CA)

Notable votes in favor:
Boehner (R-OH)
Paul (R-TX)
Ryan (R-WI)

http://clerk.house.gov/evs/2010/roll401.xml

[Jeffersonian]

Paul??? Fuck!!!!!

[pmains]

Well, it is a tax credit. Maybe the thinking is simply that lower taxes are better.

[TB]

That was my thinking when I took advantage of the tax credit.

It's about time I get a little bit of my money back from the government. The 8000 doesn't even come close to covering what I paid in last year.

(I had planned on buying a house anyway, the tax credit just sweetened the deal)

[Rich]

Ryan??? Shit!!!!!

[Some Guy]

Wow. I expect that from Ryan, but Paul? Was this at least attached to something non-treasonous?

[Subsidize Me!]

I don't think so.

Here is the text... nothing much else is noteworthy.

http://thomas.loc.gov/cgi-bin/query/z?c111:H.R.+5623:

[Property Tax Assessors]

I might take a while for us to notice that price discovery, iykwim.

[Episiarch]

Which is why everyone should appeal their property tax as soon as possible. Flood the fuckers with appeals.

[Mister DNA]

But are policemen hiding behind the skirts of little girls, and have their eyes turned the color of frozen meat?

[KPres]

I was supposed to close today. Lender was to backed up, now we can't close till Friday. Would have cost me $8000.

[mhpole]

KPres, I hope you're not thinking the credit was extended based on this blog post. It hasn't been extended yet and with the way the Senate changed the bill to include unemployment benefits, it's not necessarily likely to be.

[KPres]

Whatever, nothing I can do about it now.

[mhpole]

This article is pretty misleading. The credit isn't extended until the Senate approves it. Even then it still has to be signed into law by the President.
As for the commenters, I assume you're all apartment-dwellers or current homeowners. Otherwise you'd know what it was like to be unable to close by today and lose an $8,000 credit.

[Dagny T.]

Yes, on a case by case basis, it sucks to miss out. I have spent many hours helping people claim this, and despite my bitching below, I was happy to help them get the best tax answer. But one can still object to this kind of flawed, counterproductive social engineering through the tax code on a public policy level. They can't keep handing out refundable $8,000 credits forever (*knocks on wood*), so someone's got to be at the end of the cutoff.

[Chemman]

The car companies do. Why do you think the government is any different.

[Subsidize Me!]

Cry me a river.

Had the credit never existed, you would be paying less for your house. So there.

[KPres]

Whatever. See my post above yours. It was never my money anyway. I'll take it if they're giving it, but I'm no hypocrite.

[Subsidize Me!]

I wasn't criticizing you at all. 8k is a good chunk of money.

I hate the sentiment that leads to statements like "I assume you're all apartment-dwellers or current homeowners. Otherwise you'd know what it was like to be unable to close by today and lose an $8,000 credit." - which you didn't express.

[mhpole]

I'm not really certain I'd be paying less for my house, Subsidize Me! I'm buying a foreclosure for an extremely reasonable price. This credit allured many people like myself to purchase foreclosures and short sales. I'm not asking to allow new buyers into the credit. My point is that I went into contract by the deadline. It was failed logic to insist on closing within 2 months of the contract deadline. There are inherent difficulties in purchasing foreclosed and short sale houses. There was no way I could have possibly been more diligent about this purchase. It wasn't feasible. I feel that it's entirely unfair that I lose out on this credit when there was nothing more I could've done to facilitate an on-time closing. The extension in question isn't letting new buyers in. It's simply allowing buyers who DID what they were supposed to a reasonable amount of time to close. The credit itself is one of the main reasons for people not being able to close on time, due to the backlog it created.
I'm not asking anyone to cry me a river here. I'm saying don't punish those of us who are doing everything the credit was intended for.

[fellcolor]

Fuck fair. If you can see that it was skewed logic now, you could see that it was skewed logic when you made the offer. It sucks, and in a pretty stunning way.

[Dagny T.]

Noooo! Just when I thought I'd seen the last of that stupid ass credit, and people who don't really qualify for it, but their realtors don't understand the rules, or people amending their '09 returns instead of just claiming the damn thing in '10. I have spent more time explaining this credit than any other single tax issue this year. Enough already.

[Warty]

Are you some sort of accountant, my sweetums?

So, after I'm finished with you, you can explain to a friend of mine why it's not a great idea to blow her home tax credit on a Harley. I promise I'll tell you that you're pretty.

[Mike Laursen]

As always though, the real fraud is hidden in plain sight. May figures [pdf] show how the real estate market tanked as soon as the tax credit was withdrawn.

And you can just plain forget about unloading that creepy, old mansion:
http://www.theonion.com/articl.....epym,2471/

[Astrid]

Funny you mention that, the Amityville House is up for sale.

[Tina Wilshew]

Well well Well, imagine that dude. Who woulda thunk it?

Lou
http://www.anon-surfing.at.tc

[j.i.am]

Without it, there's nothing standing between dumb buyers and the horror of price discovery.

Nice, but with price discovery some of the horror will go to the seller. The tax credit was not intended to help just the buyer. It helped banks and real estate agents mostly. They have powerful lobbies by some strange coincidence.

[j.i.am]

Ughh, make that "Nice, but" a "Nice, and".

[JoshINHB]

"The tax credit was not intended to help just the buyer. It helped banks and real estate agents mostly."

Actually it doesn't help the buyer at all. I'll bet the inflated sales prices are way more than the amount of the tax credit.

[Homebuyer credit]

Bringing this credit back is not supposed to help buyers. It really helps realtors, who need the commission income, local governments who need the tax and fee income and holders of foreclosed properties, who have massive inventory that still needs to be moved.

[Homebuyer credit]

Further stimulus to the 'housing market' without the cooperation of lending institutions to ease credit and stem the tide of foreclosures will have little if any effect toward economic recovery and stabilization of the housing sector . . . regardless of how low home loan interest rates fall and unemployment remains at or close to its present levels!!!